MUCHA
Dec 16, 2007, 04:38 PM
Can you please help me with this homework?
Dennis Co is an 80%-owned subsidiary of Kay Industries. Dennis Co issued 10 –year 8% bonds in the amount of $1,000 000 on January1, 20x1 . The bonds were issued at face value, and interest is payable each January 1. On January 1, 20x3 Kay Industries purchased all of the Dennis bonds for $968 000 000. Kay will amortize the discount on a straight –line basis. For the years ending a December 31,20x3 and (b) December 31, 20x4, determine the effects of this transaction
1. On consolidated net income
2. On the distribution of income to the controlling and noncontrolling interests.
Dennis Co is an 80%-owned subsidiary of Kay Industries. Dennis Co issued 10 –year 8% bonds in the amount of $1,000 000 on January1, 20x1 . The bonds were issued at face value, and interest is payable each January 1. On January 1, 20x3 Kay Industries purchased all of the Dennis bonds for $968 000 000. Kay will amortize the discount on a straight –line basis. For the years ending a December 31,20x3 and (b) December 31, 20x4, determine the effects of this transaction
1. On consolidated net income
2. On the distribution of income to the controlling and noncontrolling interests.